1 Member of Islamic Development Bank Group

Transcription

1 1 Member of Islamic Development Bank Group

2 Aa3 rating (Moody s) THE ISLAMIC CORPORATION FOR THE INSURANCE OF INVESTMENT AND EXPORT CREDIT 2 Member of Islamic Development Bank Group

3 IFSR Aa3 Credit Alliance ICIEC is a multinational institution with full juridical personality and multilateral status Established in 1994 & based in Jeddah KSA with a representative office in DIFC - Dubai Owned by the Islamic Development Bank Group in addition to 40 member countries from Asia, Africa and Europe Subscribed capital is US$ 600 million Rated Aa3 by Moody's The only Export Credit Agency in the world that provides export credit & Investment insurance in compliance with the Islamic Shariah Permanent Member in Berne Union, Coface Alliance, Prague club and founding member of AMAN Union 3 Member of Islamic Development Bank Group

4 ICIEC Member Countries 4 Member of Islamic Development Bank Group

5 ICIEC Rating Excerpt from Moody s rating Report IFSR Aa3 ICIEC's rating reflects both the stand-alone fundamentals as well as potential support from its shareholders/idb Group member countries. Furthermore, the rating reflects ICIEC's legal structure and business nature, as the only multilateral export credit and investment insurance corporation in the world that provides Shariah-compatible insurance and reinsurance products. As well as its enhanced regional knowledge based on its experience by operating in the region. Moody's also notes that as a member of the IDB Group, ICIEC benefits from various managerial synergies and support. 5 Member of Islamic Development Bank Group

6 6 Member of Islamic Development Bank Group Business Model

7 Development al Mandate Strengthening of economic relations among member countries of the OIC on the basis of Islamic Sharia. Export Credit Insurance Investment Insurance Import Credit Insurance Domestic Credit Insurance 7 Member of Islamic Development Bank Group

8 ICIEC Mandate Export Credit Insurance To encourage exports from Member Countries to the rest of the World Investment Insurance To encourage the flow of capital and investments from the World to Member Countries Domestic Credit Insurance Covering domestic sales of exporters in member countries Import Credit Insurance Helping member countries import of strategic and capital goods from the world 8 Member of Islamic Development Bank Group

9 ICIEC Takaful Model Capital Subscriptions Investment Returns Shareholders Fund Surplus Premiums Recoveries Insurance Management Wakala Fee Deficit Financing Reserves Surplus from Operations Investment Returns Profit share ( Shareholders Investment Returns) Policyholders Fund Surplus Claims 9 Member of Islamic Development Bank Group

10 10 Member of Islamic Development Bank Group Products Mix

11 Reinsurance Credit Insurance ICIEC Product Mix Export & Domestic Credit Insurance: Comprehensive Short term Policy Specific Transaction Policy Supplement Medium term Policy Trade Credit Suppliers Insurance Inward Reinsurance : Quota Share Treaty Facultative Reinsurance Excess of Loss Treaty Banks ECAs Trade Finance and Investment Insurance Bank Master Policy Documentary Credit Policy Loss Payee Assignment for CSTP/STP PRI for Financing Facilities Non-Honoring of Sovereign Financial Obligations Political Risk Investors Insurance Foreign Investment Insurance : Equity Investments Non Equity Investments 11 Member of Islamic Development Bank Group

12 12 Member of Islamic Development Bank Group For Suppliers

13 Non Payment caused by War and civil disturbance Insolvency of the Buyer/LC issuing Bank Non Payment caused by Expropriation Political Risks Covered Non Payment caused by Currency Transfer Restrictions Cancellation of the contract arbitrarily by the buyer Commercial Risks Covered Refusal of the buyer to accept Goods after shipment Failure or refusal of the Buyer/ LC issuing Bank to pay 13 Member of Islamic Development Bank Group

14 Three products Comprehensive Short Term Policy (CSTP) Covers exporters against the risk of non-payment by their buyers due to commercial or political reasons. Should the buyer not pay on due date, an insured exporter may revert to ICIEC to be covered. In order to obtain this coverage, the exporter needs to be a CSTP Holder and have its buyers approved for insurance cover. The buyers can be everywhere in the world. The term of coverage for the CSTP within 180 days. Specific Transaction Policy (STP) V1 Is designed to insure single short and medium export transactions, usually associated with project finance. It covers the same risks as the existing Supplemental Medium Term Policy (SMTP) which caters for medium-term wholeturnover business. Specific Transaction Policy (STP) V2: Contract Frustration 14 Member of Islamic Development Bank Group

15 Facilitating Project Finance Insuring Projects awarded to Member Countries Exporters Single Transaction Policy Covering Contracts Supply & Installation of Cables 7 Years Supplier Credit Structure Ethiopian Electric Power Company 80% of Risk ceded Loss Payee Project Finance International Reinsurers Opens Letter of Credit Commercial Bank of Ethiopia 15 Member of Islamic Development Bank Group

16 Insuring Projects awarded to Member Countries Exporters Inward Facultative Reinsurance Policy USD 17.5 m Insurance Policy USD 51 mil Guarantee Payment ICIEC enabled project by helping Tunisian ECA to insure the non payment risk of the buyer. The Tunisian Exporter was able offer 3 years supplier credit facility and have won the project Ministry of Finance of Rwanda Electricity Water and Sanitation Authority - Rwanda 16 Member of Islamic Development Bank Group

17 Galilah Water Desalination Plant - UAE Milestone Payments US/Indian contractor EPC Contract Water Desalination Plant Project Owner Federal Electricity & Water Authority (UAE) USD 25 million Insurance Cover 1. Covered Party American Contractor 2. Cover Against Non-payment by Federal Electricity & Water Authority - UAE 3. Project Implementation Period - ~ 3 Years 4. Percentage of cover 90% 5. ICIEC Covered amount USD 25 mn 6. Status currently underway 17 Member of Islamic Development Bank Group

18 Algerian Telecom Transaction Huawei (China/Algeria ) DSL Equipment Share of DSL Revenues Algeria Telecom DSL Services DSL Revenues Internet Internet Subscribers Internet Subscribers Internet Subscribers Subscribers USD 8 million Insurance Cover 1. Covered Party Huawei 2. Cover Against Non-payment by Algeria Telecom of Huawei s share of revenues from DSL Services Profit Sharing Agreement 3. Contract Duration - ~ 2 Years 4. Percentage of cover 90% 5. ICIEC Covered amount USD 8 mn 6. Status currently underway 18 Member of Islamic Development Bank Group

19 Facilitating Imports of Capital Goods from Non MCs Insuring Muharraq Sewage Treatment Plant - Bahrain Non Honoring of Financial Sovereign Obligation Insurance Policy 15 years Financing facility 15 years Sovereign Guarantee Ministry of Finance Bahrain Muharraq SWTP Bahraini SPV owned by Build-own-operate contract Ministry of works (Bahrain) 19 Member of Islamic Development Bank Group

20 20 Member of Islamic Development Bank Group For Investors

21 War and civil disturbance. Non Horning of Sovereign Obligations Political Risks Covered Currency Transfer Restrictions Breach of contract Expropriation 21 Member of Islamic Development Bank Group

22 Political Risks insurance For Investors Equity Investment Insurance Policy (EIIP) The policy provides insurance coverage for cross border equity investment by any individual or company against transfer & convertibility, Expropriation, War and Civil disturbance and breach of contract. Financing Facility Insurance Policy (FFIP) Provides insurance coverage for cross border financing by banks and financial institution against transfer & convertibility, Expropriation and War and Civil disturbance. Non Honoring of Sovereign Obligations (NHOSO) Provides insurance coverage against the default of governments and government owned entities in meeting their sovereign obligations 22 Member of Islamic Development Bank Group

23 Sample Transaction Equity Investment Insurance Policy Remaining 50% Now Controls 100% Hikma Pharmaceuticals Multinational pharmaceutical that manufactures branded, generic and in-licensed pharmaceutical products It was founded in Jordan in 1978 by Samih Darwazah Al Dar Al Arabia Pharmaceutical Manufacturing Co. Company engages in manufacturing pharmaceuticals,exclusively penicillin owns a 6,000 m2 manufacturing facility. The company was founded in 2005 and is based in Algeria Policy Type : Equity Investment Insurance Policy (EIIP) Project Value : US$ 45 mil Insured amount : US$ 20 million Tenor : 7 years Risk covered Transfer & convertibility,expropriation, war and Civil disturbance and breach of contract. 23 Member of Islamic Development Bank Group

24 Facilitating Intra FDI: Investment in Member Country Investor from Turkey Factory in MC Insurance Policy Euro 75 million 1. Covered Party Turkish 2. Cover Against Transfer Restriction, Expropriatio n, War & Civil Disturbance, 3. Insurance Duration 5 Years 4. Percentage of cover 90% 5. Investment Value Euro 75 million 6. Status currently underway 24 Member of Islamic Development Bank Group

25 Dakar New International Airport project, Senegal African Corporation Financing Facility Project Company Dakar airport Project Insurance Euro 50 mn 100% ownership Government of Senegal 1. Covered Party African Corporation 2. Cover Against Expropriation, War & Civil Disturbance, Breach of Contract 3. Insurance Duration 15 Years 4. Percentage of cover 95% 5. Investment Value Euro 594 million 6. ICIEC Covered amount Euro 50 million 7. Status currently underway 25 Member of Islamic Development Bank Group

26 Non Honoring of Sovereign Financial Obligations (NHOSO) Provides insurance coverage against the default of governments and government owned entities in meeting their sovereign obligations 2 3 ICIEC 1 GOE 1. Bank enters into a cross border finance agreement with Government Owned Enterprise in another member country. 2. The Banks concludes an Insurance Contract with ICIEC and pays premium. 3. In case the Government Entity fails to pay, ICIEC compensates the bank with 90% of the insured finance value. 4. ICIEC recovers from the buyer an returns 10% share to the bank. 26 Member of Islamic Development Bank Group

27 Muharraq Sewage Treatment Plant - Bahrain International Bank Financing facility Special Purpose Vehicle - Bahrain Build-own-operate contract Muharraq SWTP Insurance Policy USD 17 million Sovereign Guarantee Ministry of Finance Bahrain 1. Covered Party Int. Bank 2. Cover Against Nonhonoring of payment guarantee by the MoF Bahrain 3. Insurance Duration ~ 20 Years 4. Percentage of cover 95% 5. ICIEC Covered amount USD 17 million 6. Status currently underway 27 Member of Islamic Development Bank Group

28 AlSufouh Tram Project, Dubai- UAE International Bank Financing facility Dubai Department of Finance ECA support Insurance Policy USD 40 mn Road and Transport Authority Contractors Turn-key contract 1. Covered Party Int. Bank 2. Cover Against Nonhonoring of payment by Dubai Department of Finance 3. Insurance Duration 5 Years 4. Percentage of cover 95% 5. ICIEC Covered amount USD 40 mn 6. Status currently underway AlSufouh tram project 28 Member of Islamic Development Bank Group

29 Istanbul Metro project, Turkey MIGA World Bank (Insurer) Insurance Policy Euro 280 million Banks Syndicate Financing Facility Istanbul Metro Project Reinsurance Euro 15 mn Guarantee Istanbul Municipality - Turkey 1. Covered Party MIGA 2. Cover Against Nonhonoring of payment guarantee by the Istanbul Municipality 3. Insurance Duration ~ 10 Years 4. Percentage of cover 95% 5. Investment Value Euro 280 million 6. ICIEC Covered amount Euro 15 million 7. Status currently underway 29 Member of Islamic Development Bank Group

30 Sabodala Gold Project, Senegal Financing Facility Insurance Policy Insurers Catlin, Chubb, AIG Reinsurer PRI Cover Macquarie Bank Limited (Australia) Financing MDL Company (Australia) Sabodala Gold Project, Senegal Investor: MDL, Australia Financier: Macquarie Bank Limited, Australia Host country: Senegal Insurance tenor: 4 years Investment Value: US$175million Risks covered: Expropriation, War & Civil Disturbance, Transfer Restriction ICIEC Cover: US$22.1 million 30 Member of Islamic Development Bank Group

31 31 Member of Islamic Development Bank Group For Banks

32 Bank Master Policy (BMP) Provide insurance of banks export related financing to its customers on an Islamic basis against both commercial and political risks Documentary Credit Insurance Policy (DCIP) To protect the commercial bank against the risk of non-payment of an Import Letter of Credit issued by an importer's bank and confirmed by the policyholder on behalf of its exporting customer. Loss Payee Assignment Allowing the banks to provide export related financing to its customers and utilize the export receivables as security for the repayment of the credit extended. Financing Facility Insurance Policy (FFIP) Provides insurance coverage for cross border financing by banks and financial institution against transfer & convertibility, Expropriation and War and Civil disturbance. Non Honoring of Sovereign Obligations (NHOSO) Provides insurance coverage against the default of governments and government owned entities in meeting their sovereign obligations 32 Member of Islamic Development Bank Group

33 33 Member of Islamic Development Bank Group For ECAs

34 Inward Reinsurance For ECAs Reinsurance Facilities Agreement (RFA). This product is offered to Export Credit Agencies (ECAs) and commercial insurance companies in Member Countries, The RFA is essentially a facultative reinsurance arrangement that could be developed into a quotashare treaty. Quota Share Treaty Is a proportional reinsurance Treaty offered to ECAs in the member countries, which states taking a stated percent share of their entire portfolio as a support to their insurance capacity Excess of Loss Is non proportional reinsurance designed to help ECAs to underwrite large transactions 34 Member of Islamic Development Bank Group

35 Sample Transaction: Inward Reinsurance Janzoor Investment Project (Libya) Reinsurance Contract Investor: Libyan General Trading Company Kuwait Host country: Libya PRI Cover Janzour Project (Libya) Insurance tenor: 10 years Investment Value: US$121million Insured amount: US$ 74 million Risks covered: Expropriation, War & Civil Disturbance, Transfer Restriction, Breach of Contract ICIEC Cover: US$7.4 million Member of Islamic Development Bank Group

36 Sample Transactions: Inward Quota Share ECIE UAE ICIEC share :15% BI since inception: US$ 6.5m ICIEC share : 60% BI since inception: US$ 8.5 m NAIF Sudan ICIEC 36 Member of Islamic Development Bank Group

37 37 Member of Islamic Development Bank Group

38 We also offer technical assistance Investment Promotion Technical Assistance Program (ITAP) ITAP an initiative of the IDB Group, was established in Its objective is to help unlock the developmental potential of its 56 Member Countries through a comprehensive and integrated program of foreign direct investment promotion technical assistance. Its focus areas include institutional development, sharing best practices, and information dissemination on investment opportunities in Member Countries. 38 Member of Islamic Development Bank Group

39 ITAP IDB Group s Investment Promotion Technical Assistance Program Guiding Philosophy: Share the expertise and experience of successful Member Countries with other Member Countries Promote intra-member country investment ensure that greater outward flows of FDI from developed IDB MCs end up in developing ones Country Promotion Programs. Cooperate strongly with other MDBs and institutions and agencies to maximize synergy and avoid Duplication Help increase the volume of FDI coming into our Member Countries Member of Islamic Development Bank Group

40 ITAP IDB Group s Investment Promotion Technical Assistance Program The types of technical assistance provided by the program: Needs Assessment Studies Capacity Building of Investment Promotion Agencies and relevant government institutions Identification of investment opportunities Country Promotion events, including seminars and conferences Policy Advice to improve investment environment Development of Investment Information Networks on the internet, as well as common software platforms that help in matching investors with projects in Member Countries. 40 Member of Islamic Development Bank Group

41 Client base 41 Member of Islamic Development Bank Group

42 42 Member of Islamic Development Bank Group Business Indicators

43 Major Business Indicators New Commitments (USD mn) Member of Islamic Development Bank Group

44 Major Business Indicators Business Insured (USD mn) Member of Islamic Development Bank Group

45 Major Business Indicators Current Exposure (USD mn) Member of Islamic Development Bank Group

46 Claims Ratio ICIEC Atradius Eurler Hermes Coface 91% 98% 69% 130% 79% 82% 57% 57,0% 97% 77% 42% 45,0% 41% 45% 50,3% 5% 5% 13% 0% 1,0% Member of Islamic Development Bank Group

47 Business insured Distribution by Line of Business Short Term Medium Term Investment Member of Islamic Development Bank Group

48 Portfolio Composition by sector Top Gross Exposures by Economic Sector Telecommunication 7% Power & Energy 5% Health Care 6% Cables 5% Others 10% Transportation 4% Papers & Packaging 3% Logistics 2% Banking 30% Chemicals 1% Oil & Gas 1% Metals 11% Sovereigns & GREs 13% 48 Member of Islamic Development Bank Group

49 ICIEC and Kazakhstan so far: Kazakhstan became a member of ICIEC in Only ICIEC member country in the region. A Reinsurance Facility Agreement signed with KECIC in 2004 which remained inactive due to lack of demand. Until now no transaction has been materialized mainly due to lack of marketing resources on ICIEC side and the export structure of the country. In 2012 ICIEC appointed a local agent in Kazakhstan. 49 Member of Islamic Development Bank Group

50 Opportunities for export credit insurance: With 2011 figures 78% of goods exports of Kazakhstan are in minerals sector (oil, fuel etc.) which are transacted by commercial banks. GoK, under the Strategic Development Plan 2020 is planning to increase the share of non-extractive sectors which would help increase business potential for ICIEC. ICIEC will cooperate with KazexportGarant for reinsurance and coinsurance operations for Kazakh exporters ICIEC aims to sign two DCIPs during which will enhance LC confirmation capacity of Kazakh banks (commercial and islamic). Seminars for the exporting community and banks with the help of the local agent and KazexportGarant. 50 Member of Islamic Development Bank Group

51 Opportunities for investment insurance: Kazakhstan will require a total investment of USD 230 billion until USD 170 billion will be private investments including FDI. ICIEC can insure the political risks of equity investors and project financings of foreign banks up to 20 years. ICIEC will cooperate with KazNex Invest to insure FDI and with foreign banks to insure project financing related loans. ICIEC aims to insure two FDI transactions during One existing client of ICIEC is planning an equity investment in Kazakhstan. Turk Eximbank (ICIEC s local agent in Turkey) is promoting PRI among Turkish investors who have plans to invest into Kazakhstan. Cooperation with international insurance brokers for PRI. 51 Member of Islamic Development Bank Group

52 ITAP activities so far and its plans for Kazakhstan: Between , 9 participants from several ministries and KazNex Invest joined Capacity Building Programs organized by ITAP in collaboration with different national and international organizations such as MIDA Malaysia, UNCTAD, UNIDO, ISPAT Turkey, MOE Turkey, TEPAV Turkey. In September 2011 ITAP-ISPAT organized a training program for Effective Road Show Implementation for KazNex Invest in Astana. In March 2012 ITAP-WAIPA organized a Certificate Program for KazNex Invest and CIS member countries. ITAP will continue its support to Kazakh economy by organizing training programs and will help KazNex Invest to develop a comprehensive investment promotion strategy through implementing international best practices such as CRM, investor s tracking system for better client management 52 Member of Islamic Development Bank Group

53 53 Member of Islamic Development Bank Group Thank you